Zcash (ZEC) Hashrates Explode And Mining Profitability Takes a Toll
Zcash seems to be getting popular right now, at least that is the conclusion that someone could take by looking at the hash rates right now. According to a report created by Diar, the hash rates of ZEC have basically exploded during a spike this month.
For instance, during April 22, just a few days ago, ZEC reached a new all-time high peak of 4 Gigahash per second (GH/S). On April 1, the same network had a hash of only 2.7 GH/s, so this is a huge spike, not only a prominent one. This made the hash rate go up 42% since the beginning of 2019 when the activity was fairly low than what it is right now.
Why has mining increased so much? Because prices skyrocketed. ZEC tokens increased its price by 950% since 2018. Mining was considerably more profitable than mining Bitcoin last year, which is part of the reason why ZEC is so popular at the moment.
Curiously, the number of transactions using ZEC tokens has remained flat. This shows an increase in mining (because of high hashrate) but not in usage, which is odd. This may be an speculative move in which a lot of people are mining the tokens as mining itself is profitable, but not really using the tokens.
The Spike Also Had Some Negative Side Effects
Often, great news also has a bad side and this time was no different. If there is a lot of people mining ZEC, their profits are going to deteriorate as the hash rate will increase. This means that mining ZEC is getting increasingly not as profitable as it once was, which may eventually get some miners off mining and make the hash rate go down again.
Hash rates going up when everybody wants to mine are a good measure to always keeping the network stable. If there is a mining rush, these miners will make less money until they are forced off the game and the ones remaining will get more profits later.
It is also important to note that Zcash is on the verge of its next halving, which is when the mining rewards are diminished by half. The halving will happen in 2020 and it will diminish profitability, however, it may also drive prices up, just as it does with the Bitcoin network whenever a halving happens.
Zcash (ZEC) is cryptocurrency focused on privacy which was created by the Electric Coin Company. The token was launched in 2016 and it is often compared to Monero (XMR) as one of the most valuable privacy coins in the market.
At the time of this report, each ZEC token cost $64.58 USD. The total market cap of the network was $413,072,725 USD and the volume was $193,587,426 USD in the last 24 hours with almost 6.4 million ZEC tokens around. The token went up 0.47% in the last 24 hours.